🇮🇹Italy · Taxes
Italy — Taxes
Italy taxes for foreign residents: IRPEF brackets, HNWI Lump Sum €300k, 7 % pensioner regime, Impatriati exemption, crypto 33 %, no exit tax. Real numbers.
Italy taxes worldwide income and holds the top IRPEF rate at 43 %. In parallel, three special regimes rewrite what counts as the taxable base. This chapter is the arithmetic, without a regime, and with each of them.
The base logic, worldwide income, three exceptions
An Italian tax resident pays on global income: salary in Lisbon, dividends in Zurich, gain on a flat sold in Istanbul. Residency is triggered by physical presence for more than 183 days in a calendar year, or by the "centre of vital interests" test, non-numerical but real. Family in Italy, child in an Italian school, primary banking, that suffices, even if you spent fewer than 183 days here.
That is where the ordinary tax conversation ends. The Italian conversation continues. Three regimes, HNWI Lump Sum, 7 % Pensionati, Impatriati, rewrite what counts as the base. They are not "edge planning"; each is a Ministry of Economy programme codified in the TUIR (Testo Unico delle Imposte sui Redditi). Each has a hard entry condition. They are mutually exclusive.
IRPEF, three brackets after the 2024 reform
IRPEF is the national personal income tax. The 2024 reform simplified the scale from four brackets to three:
- 23 % on income up to € 28,000 per year.
- 35 % on income between € 28,000 and € 50,000.
- 43 % on income above € 50,000.
These are national figures only. On top sits the addizionale regionale (1.23–3.33 % depending on region, highest in Lazio and Campania, lowest in Veneto and Trentino) and addizionale comunale (0–0.9 %, set by the municipality). Effective marginal rate for a Milanese resident earning €60k sits near 46 %; same salary in Perugia is closer to 44.5 %.
Standard deductions apply: dependents, medical expenses above €129, mortgage interest up to €4k a year, primary-residence renovation (Bonus Casa, up to 50 % spread over ten years). Filing is by modello 730 for employees, modello Redditi PF for the self-employed and complex cases; the calendar deadline is end of September, late filing through end of October carries a small fee.
HNWI Lump Sum, most expensive, most generous
Codified in Article 24-bis of the TUIR. A flat annual fee replaces tax on all foreign-source income, dividends, interest, capital gains, royalties, sale of foreign real estate. Italian-source income is taxed separately at standard rates.
The arithmetic
From 1 January 2026 the fee is € 300,000 a year for the primary applicant. Before that date the figure was lower, €100k for those who moved before August 2024, €200k for the August 2024 – December 2025 window. Each family member (spouse, children) adds € 25,000. Duration: 15 yr, not extendable.
The regime pays off when foreign income is stably above roughly €700k a year, that is the break-even where €300k fixed beats the standard 43 % plus regional surcharges. Below that line it is a loss.
Entry condition
You must not have been Italian tax resident for at least 9 of the previous 10 years. Application is via ruling to the ; the response comes within 120 days. Capital does not need to be moved to Italy, the regime is about income earned outside it. Physical residency follows the usual 183-day rule or the vital-interests test.
7 % for foreign pensioners, a geographic trade
A foreign pensioner relocating to a southern Italian commune can elect 7 % on all foreign income, pension, interest, dividends, rental income. Duration: 10 yr.
Conditions are concrete. The commune must sit in one of the southern regions, Abruzzo, Molise, Campania, Basilicata, Calabria, Sicily, Sardinia, Apulia, and have a population below 20000. For communes hit by the 2009 or 2016 earthquakes the ceiling drops to 3,000. At least one verifiable foreign public or private pension is required.
You must not have been Italian resident for the prior five years. Once elected, the regime requires you to live in that specific commune; a move to Milan in the first year voids the election. This is a lifestyle trade as much as a tax one, small southern town, not Rome, not Sorrento.
Impatriati, employee exemption, re-cut in 2024
Governed by the TUIR as amended by Decree 209/2023 (in force from 2024). Exempts 50 % of employment or assimilated income for a new resident. With a minor child the exemption rises to 60 %. Duration: five years, extendable by three more upon purchase of a primary residence in Italy.
Before 2024 the regime was more generous, 70 % exemption, 90 % for southern regions, no qualification requirement. The reform raised the bar. Now: non-resident in Italy for at least 3 yr before the move, holding a "highly specialised" role (degree plus matching experience), employer must be an Italian-resident entity. Self-employed are admitted but only when the activity requires professional registration (lawyer, doctor, engineer).
The remaining base is taxed at standard IRPEF rates. For a specialist on an €80k salary the effective marginal rate drops from about 43 % to roughly 21–22 %. This is the regime for northern offices, Milan, Turin, Bologna, where Italian-resident employers can frame a contract in the qualifying category.
Investments, dividends, crypto
Dividends and capital gains on securities are taxed at a flat 26 %. This covers Italian and foreign instruments alike; the standard IRPEF schedule does not apply, and the special regimes (HNWI, Impatriati) do not reduce tax on Italian-source dividends.
Crypto is a separate story. From 1 January 2026 the rate on crypto capital gains rose to 33 % from the previous 26 %. Declaration is mandatory when total balances exceed €2,000 on 31 December and on any realised gain. Exchanges (Binance, Kraken, Coinbase, Italy's Young Platform) report data on resident users to the Agenzia delle Entrate under DAC8, the "nobody will know" approach is no longer viable.
Foreign-held assets get their own form, Quadro RW. Not taxation, inventory: bank accounts above €15k on 31 December, real estate, shareholdings in foreign companies. Penalty for non-filing runs 3–15 % of the undeclared asset value. This is the form everyone complains about and everyone files anyway.
CFC, exit tax, what is and is not there
Controlled Foreign Company rules apply. From 2024 the effective-rate test was updated to align with OECD Pillar 2: a foreign company paying an effective rate below 15 % attributes its income to the Italian owner, taxed at standard IRPEF. The passive-income threshold (more than one third of income passive) is applied separately.
No exit tax on individuals. This is unusual in Europe, Germany, France, Spain all impose exit tax on unrealised capital gains when residency is given up. Italy does not. That makes it a sensible "exit residency" for someone planning to move on after a few years.
Italy's tax-treaty network
Italy maintains an active double-taxation treaty network with roughly 100 jurisdictions, covering most of Europe, North America, major Asian economies, much of Latin America. The standard relief is the foreign-tax credit, tax paid abroad credits against the Italian liability on the same income, up to the Italian rate.
Several treaties have been updated in recent years to align with OECD BEPS, anti-abuse clauses (principal purpose test), reduced withholding on dividends for substantial holdings, mutual agreement procedures. Notable update: the Italy–Switzerland frontier-workers agreement (2023) and Italy–France (2022) protocol on cross-border workers.
Three jurisdictions deserve a flag. The Italy–Russia treaty is partially suspended as of August 2023 (the Russian side); see the RU edition of this chapter for the detail. The Italy–Ukraine treaty is fully active. The Italy–US treaty has unusual mechanics for citizenship-based US taxation, US citizens resident in Italy file in both jurisdictions and use the foreign-tax credit; the foreign earned income exclusion has its own rules.
Frequently asked
What is the top income tax rate in Italy?
The top IRPEF rate is 43 %. That is the national portion. Regional surcharge adds 1.23–3.33 % and municipal surcharge 0–0.9 %. Effective marginal rate in Milan for €60k+ income sits near 46 %; the same salary in Perugia is closer to 44.5 %.
What is the HNWI Lump Sum regime and who does it fit?
A flat € 300,000 a year instead of tax on all foreign income, for 15 yr. Codified in Article 24-bis TUIR. Break-even sits around €700k of stable foreign income, below that the standard schedule is cheaper. Entry condition: non-resident in Italy for 9 of the prior 10 years.
Can I qualify for the 7 % pensioner regime?
Yes if: foreign pensioner with at least one verifiable foreign pension, move to a southern Italian commune of population below 20000 (Abruzzo, Molise, Campania, Basilicata, Calabria, Sicily, Sardinia, Apulia), non-resident in Italy for the prior 5 years. Rate 7 % on all foreign income for 10 yr.
How does Italy tax crypto in 2026?
Capital gains and realisations are taxed at 33 % (raised from 26 % in 2025). Declaration is mandatory when total balances exceed €2,000 on 31 December. Exchanges report resident users via DAC8, the Agenzia delle Entrate sees the balances.
Do CFC rules apply to an Italian resident?
Yes. From 2024 the effective-rate test aligns with OECD Pillar 2: foreign companies paying an effective rate below 15 % attribute income to the Italian owner, taxed at standard rates. The passive-income threshold (over one third passive) is applied separately.
Does Italy have an exit tax for individuals?
No. Italy does not impose exit tax on unrealised capital gains when an individual transfers tax residency abroad. This is unusual in Europe, Germany, France and Spain all do. It makes Italy a sensible interim residency for those planning to move on after several years.
Verified · 2026-04-15